BUDGET: What's in the books for Pacific Islanders?

May 21, 2021



By Khalia Strong - khalia.strong@pmn.co.nz

The Budget 2021 announcement was met with mixed reactions from all sectors. 

The main focus of the Budget was tipped to be wellbeing and balance, but some are calling it the 'Benefits Budget' with a focus on support for low income families, with not much towards the working population and small businesses. 

We have compiled reaction from Pacific leaders and experts for each category. 

Benefits: 

Benefits are set to increase by between $32 to $55 by April next year, with a $20 increase starting from July. 

Prime Minister Jacinda Ardern said raising the benefit will address areas that are linked to child poverty. 

"We have been supporting initiatives that are all about addressing food insecurity. We're increasing transitional housing places, we of course have the support in place for emergency housing. On rents, people have raised the question, will these increases in main benefits go directly to rent increases, or cause rents to go up? We went back through the evidence, and haven't seen a correlation that rents would go up as a result."

Auckland Action Against Poverty's Brooke Stanley-Pao said Labour could have been braver in making real change for the families that need it most. 

"Why couldn't they give us liveable incomes? Why can't they transform the welfare system? Why can't they acknowledge and invest in the communities that need it most?"

Stanley-Pao said it was a chance for Labour to fulfil their promises and was upset the value of people in the communities wasn't recognised. 

"Labour continue to talk about and acknowledge that there is a lot of work to be done. Well, when are they going to do that?"

Auckland University lecturer in Pacific Studies Emmaline Pickering-Martin said the government missed an opportunity for bold action. 

"Unless they're gonna do something around housing, something big like rent caps - which I know they won't do because they're so hoha about upsetting palagi rich people - we're just like dog chasing its tail where we're not making any difference because we're not willing to be brave enough to just do it, to just help our poor people."

Samoa Business Network chair John Loau said there are further steps the government could take to make a big impact. 

"Either rolling back GST off fruit and vegetables, or just removing that off. We've got Pacific families who are retired pensioners who can't live off of that. They're also homeowners that are paying GST on top of rates...There are really concrete levers government could pull to lower that cost of living that is impacting our people that are on the lower financial scale."

​Education: 

$28.8 million will go towards bilingual and full-immersion education of Pacific students, and $5 million into developing gagana Tokelau and vagahau Niu as NCEA subjects. 

Teacher and University of Auckland lecture in Pacific Studies Emmaline Pickering-Martin said if we want better Pacific student outcomes, then we have to invest in a Pacific workforce for our students. 

"No body knows us better than us, so why aren't we investing in that?  We've got money going into the symphony orchestra and the ballet, where is Matatini funding, where is our Pacific funding for those sorts of things that improve student outcomes?" 

​Business: 

Ardern said we need to support business to "pivot and respond to the environment that Covid has created". 

"So there is funding in there to access digital support and training, but I'd also reflect the work that we've done since Covid to ensure we are keeping our businesses operating in very tough times, like the wage subsidy."

Wellington Pasifika Business Network chair Paul Retimanu said the government really stepped up to support businesses last year when it was unknown how the economy would react to the pandemic, but "this time around, there's nothing really in there". 

Retimanu was surprised by the lack of targeted funding, and said businesses have more costs this year. 

"We've got the extra public holiday coming with Matariki, we've got an extra five days sick leave allocated to staff, so there's a lot of extra compliance costs in there, particularly for small businesses."

MENA Designs co-owner and former National MP Fonoti Agnes Loheni said if we want growth and prosperity, that has to come from businesses and jobs.  

"These social, better outcomes that we want? It's still got to come from people that are working, and actually there wasn't anything for the working Mum and Dad that are also struggling with these rising costs."

$16.2 million has been allocated towards Pacific support services, but Samoa Business Network Incorporated chair John Loau said it's not what their community needs. 

"The majority of our business from a Pacific base - they're mature, and they're operating and it just feels like there's nothing new coming out of this particular budget. 

Westpac's Senior Economist Satish Ranchod said the economy is going to pick up speed again over the next few years. 

"We've got the support from increases in government spending, continued very low interest rates, that is going to provide quite a big boost to many parts of the economy. 

"I think the big winner is going to be areas like construction, but we're also seeing retail spending picking up. It is still going to be a tough time for a number  of those families, particularly those with links to the tourism sector still looking pretty soft."


​Childcare: 

​Low and middle income families are also getting a helping hand with childcare costs.  

From April, the threshold for assistance with childcare costs will rise in line with average wage growth, and there will be more spaces in OSCAR after school care providers. 

Minister for Social Development and Employment Carmel Sepuloni said those 3,300 spaces will be in areas of higher deprivation. 

"We really want to hone in on communities where there are Maori and Pacific peoples. Because it's really hard to work, when you don't have access to care for your children whilst you're working, so this is very deliberate and very targeted towards our Maori and Pacific communities."

​Health: 

​Auckland University's Associate Dean Pacific Doctor Colin Tukuitonga said this funding has more potential to help the Pacific. 

"There's an increased allocation to primary care, there's $200 million to Pharmac to purchase new drugs and I would hope that Pharmac continues to fund drugs that benefit our people, for example their investment in diabetes drugs this year. 

He said looking at the health budget in itself does not tell the full story. 

"Investing in lifting benefits will have a health benefit, investment in housing will have a health benefit."


Overall: 

​Finance Minister Grant Robertson has indicated it may take until 2027 for the economy to be in surplus again, which is much sooner than many other countries. 

The government is also planning to knock their debt back down to 48 per cent of GDP, which Wellington Pasifika Business Network chair Paul Retimanu said is impressive. 

"If you compare us to Australia who are sitting at 50 per cent, and if you look at the UK they're up to 80 per ent, so I suppose they're being prudent when it comes to borrowing, which is a good thing."​

​Westpac's Senior Economist Satish Ranchod​ said the recovery from Covid will be uneven for different industries. 

"Sectors like hospitality and tourism are still struggling and that's going to continue while the borders remain closed, but other parts of our economy like construction, that'll be important with supporting an ongoing recovery with employment."

Political commentator Richard Pamatatau said he would have liked to see climate change targeted to the Pacific region, but reminds people to look at the bigger picture. 

"It's really easy to slam the government over budgets, but they're really difficult things and difficult at the moment. Yes, the business community could have been offered more, but actually, I'd argue at the moment it's the people that matter more than specifically the business community."